By Williams                                           H.B. No. 3561

         75R11235 CLG-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the Town Center Improvement District of Montgomery

 1-3     County, Texas; authorizing a tax and granting the authority to

 1-4     issue bonds.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 1, Chapter 289, Acts of the 73rd

 1-7     Legislature, Regular Session, 1993, is amended by adding Subsection

 1-8     (f) to read as follows:

 1-9           (f)  Except as otherwise provided by this Act, the district

1-10     is not subject to the jurisdiction or supervision of the commission

1-11     under Chapter 49, Water Code, or other law.

1-12           SECTION 2.  Section 2, Chapter 289, Acts of the 73rd

1-13     Legislature, Regular Session, 1993, is amended to read as follows:

1-14           Sec. 2.  DEFINITIONS.  In this Act:

1-15                 (1)  "Board" means the board of directors of the

1-16     district.

1-17                 (2)  "Commission" means the Texas Natural Resource

1-18     Conservation Commission.

1-19                 (3)  "District" means the Town Center Improvement

1-20     District of Montgomery County, Texas.

1-21                 (4) [(3)]  "Improvement  project" means any program or

1-22     project, whether individual, intermittent, or continuing and

1-23     whether located or conducted within or without the district, for

1-24     the planning, design, construction, acquisition, lease, rental,

 2-1     installment purchase, improvement, provision of furnishings,

 2-2     equipment, rehabilitation, repair, reconstruction, relocation, use,

 2-3     management, operation, or maintenance of any works, improvements,

 2-4     or facilities or the provision, support, enhancement, improvement,

 2-5     extension, or expansion of services, whether provided to, for, by,

 2-6     or on behalf of the district, necessary for the accomplishment of

 2-7     the public purposes of the district, including:

 2-8                       (A)  landscaping; lighting, banners, and signs;

 2-9     streets or sidewalks; hike and bike paths and trails, pedestrian

2-10     walkways, skywalks, crosswalks, or tunnels; highway right-of-way or

2-11     transit corridor beautification and improvements; drainage or storm

2-12     water detention improvements; solid waste, water, sewer, or power

2-13     facilities and services, including but not limited to electrical,

2-14     gas, steam, and chilled water facilities; parks, lakes, gardens,

2-15     recreational facilities, open space, scenic areas, and related

2-16     exhibits and preserves; fountains, plazas, and pedestrian malls;

2-17     public art and sculpture and related exhibits and facilities;

2-18     educational and cultural exhibits and facilities; conferences,

2-19     conventions, or exhibitions; manufacturer, consumer, or trade

2-20     shows; civic, community, or institutional events; exhibits,

2-21     displays, attractions, and facilities for special events, holidays,

2-22     and seasonal or cultural celebrations; off-street parking

2-23     facilities, bus terminals, heliports, mass-transit, and

2-24     roadway-borne or water-borne transportation and people-mover

2-25     systems; and any other public improvements, facilities, or services

2-26     similar to the foregoing;

2-27                       (B)  the removal, razing, demolition, or clearing

 3-1     of land or improvements in connection with any improvement project;

 3-2                       (C)  the acquisition of real or personal property

 3-3     or any interest therein in connection with an authorized

 3-4     improvement project provided that the district shall not have the

 3-5     power of eminent domain; and

 3-6                       (D)  any special or supplemental services for the

 3-7     improvement and promotion of the district or adjacent areas or for

 3-8     the protection of public health and safety within or adjacent to

 3-9     the district, including but not limited to advertising, promotion,

3-10     tourism, health and sanitation, public safety, security, fire

3-11     protection and emergency medical services, business recruitment,

3-12     development, elimination of traffic congestion, and recreational,

3-13     educational, and cultural improvements, enhancements, and services.

3-14           SECTION 3.  Section 6(a), Chapter 289, Acts of the 73rd

3-15     Legislature, Regular Session, 1993, is amended to read as follows:

3-16           (a)  The district has all of the rights, powers, privileges,

3-17     authority, and functions conferred on municipal management

3-18     districts by Subchapter E, Chapter 375, Local Government Code, and

3-19     by the general laws of the state on conservation and reclamation

3-20     districts created under Article XVI, Section 59, of the Texas

3-21     Constitution, and on road districts and road utility districts

3-22     created pursuant to Article III, Section 52, of the Texas

3-23     Constitution, including those conferred by Chapters 49 and

3-24     [Chapter] 54, Water Code, and Chapter 441, Transportation Code [13,

3-25     Acts of the 68th Legislature, 2nd Called Session, 1984 (Article

3-26     6674r-1, Vernon's Texas Civil Statutes)], together with the

3-27     additional rights, powers, privileges, authority, and functions

 4-1     contained in this Act.

 4-2           SECTION 4.  Section 7, Chapter 289, Acts of the 73rd

 4-3     Legislature, Regular Session, 1993, is amended to read as follows:

 4-4           Sec. 7.  Additional Specific Powers and Duties.  In addition

 4-5     to the general powers set forth in Section 6 of this Act, the board

 4-6     may, subject to the provisions and limitations hereinafter set

 4-7     forth:

 4-8                 (1)  levy, assess, and apply the proceeds from a

 4-9     limited sales and use tax for the district's purposes, provided

4-10     that, during each interval of three calendar years following the

4-11     commencement of collection of such tax, the board shall, consistent

4-12     with the district's authorized powers and purposes and in its sound

4-13     discretion, endeavor to apply an annual average of not less than 10

4-14     percent of the net proceeds of such tax collections, after

4-15     deduction of the general and administrative costs and expenses of

4-16     the district and the costs and expenses of levying, assessing, and

4-17     collecting such taxes, toward mitigation of the impact of

4-18     development within the district on adjacent areas, including

4-19     without limitation effects on public utilities and services, public

4-20     transportation and traffic movement, and scenic and aesthetic

4-21     beauty;

4-22                 (2)  borrow money for the corporate purposes of the

4-23     district;

4-24                 (3)  add or exclude territory in the manner provided by

4-25     Subchapter J [H], Chapter 49 [54], Water Code, except that Section

4-26     42.042, Local Government Code, does not apply to the district;

4-27                 (4)  contract with any person or entity for the

 5-1     accomplishment of any of the district's purposes including without

 5-2     limitation contracting [contracts] for:

 5-3                       (A)  the payment, repayment, or reimbursement,

 5-4     out of tax proceeds or any other specified source of funds, of any

 5-5     costs and reasonable carrying costs incurred by that person for or

 5-6     on behalf of the district, including all or part of the costs of

 5-7     any improvement project; or

 5-8                       (B)  the use, occupancy, lease, rental,

 5-9     operation, maintenance, or management of all or part of a proposed

5-10     or existing improvement project;

5-11                 (5)  make application for and contract with any person

5-12     or entity to receive, administer, and perform the district's duties

5-13     and obligations under any federal, state, local, or private gift,

5-14     grant, loan, conveyance, transfer, bequest, donation, or other

5-15     financial assistance arrangement relating to the investigation,

5-16     planning, analysis, study, design, acquisition, construction,

5-17     improvement, completion, implementation, or operation by the

5-18     district or others of a proposed or existing improvement project;

5-19                 (6)  make, adopt, revise, repeal, amend, promulgate,

5-20     and enforce by ordinary civil remedies reasonable rules and

5-21     regulations for the administration and operation of the district,

5-22     the use, enjoyment, availability, protection, security, and

5-23     maintenance of the district's properties and facilities, and

5-24     providing for public safety and security within the district;

5-25                 (7)  establish, revise, repeal, enforce, collect, and

5-26     apply the proceeds from user fees, concessions, admissions,

5-27     rentals, or other similar fees or charges for the enjoyment, sale,

 6-1     rental, or other use of the district's facilities, services,

 6-2     properties, or improvement projects; however, because the district

 6-3     is created in an area that is devoted primarily to commercial and

 6-4     business activity, the district may not impose an impact fee or

 6-5     assessment on a single family residential property or a residential

 6-6     duplex, triplex, quadruplex, or condominium;

 6-7                 (8)  provide or secure the payment or repayment of the

 6-8     costs and expenses of the establishment, administration, and

 6-9     operation of the district and the district's costs or share of the

6-10     costs of any improvement project, or district contractual

6-11     obligation or indebtedness, by or through a lease, installment

6-12     purchase contract, or other agreement with any person or the levy

6-13     and assessment of taxes, user fees, concessions, rentals, or other

6-14     revenues or resources of the district; [and]

6-15                 (9)  undertake separately or jointly with other persons

6-16     or entities and pay all or part of the cost of improvement

6-17     projects, including improvement projects for improving, enhancing,

6-18     and supporting public safety and security, fire protection and

6-19     emergency medical services, and law enforcement within and adjacent

6-20     to the district and improvement projects that confer a general

6-21     benefit on the entire district and the areas adjacent thereto or a

6-22     special benefit on a definable part of the district, which may be

6-23     the entire district or any part thereof; however, the district

6-24     shall not be authorized to employ peace officers; and

6-25                 (10)  impose, collect, and apply the proceeds from a

6-26     hotel occupancy tax as provided by Sections 11A and 11B of this

6-27     Act.

 7-1           SECTION 5.  Sections 8(b), (c), (e), and (k),  Chapter 289,

 7-2     Acts of the 73rd Legislature, Regular Session, 1993, are amended to

 7-3     read as follows:

 7-4           (b)(1)  Except as provided by Subdivisions (2) and (3) of

 7-5     this subsection, to be qualified to serve as a director, a person

 7-6     must be at least 18 years old and be:

 7-7                       (A)  a resident of the district;

 7-8                       (B)  an individual owner of real property in the

 7-9     district;

7-10                       (C)  an individual owner [of stock], whether

7-11     beneficial or otherwise, of at least 10 percent of the outstanding

7-12     stock of a corporate owner of real property in the district or of a

7-13     corporate lessee of real property in the district with an original

7-14     lease term of five years or more, excluding options;

7-15                       (D)  an individual owner of at least 10 percent

7-16     of the [a] beneficial interest in a trust that:

7-17                             (i)  owns real property in the district; or

7-18                             (ii)  leases real property in the district

7-19     under an original lease term of five years or more, excluding

7-20     options;

7-21                       (E)  an individual lessee of real property in the

7-22     district under an original lease term of five years or more,

7-23     excluding options;

7-24                       (F)  an individual owner of at least 10 percent

7-25     of the outstanding interest in a general or limited partnership

7-26     that:

7-27                             (i)  owns real property in the district; or

 8-1                             (ii)  leases real property in the district

 8-2     under an original lease term of five years or more, excluding

 8-3     options; or

 8-4                       (G) [(E)]  an individual agent, employee,

 8-5     officer, or director of any individual, corporation, trust, or

 8-6     partnership that owns or leases [owner of] real property described

 8-7     by Paragraph (B), (C), [or] (D), (E), or (F) of this subdivision

 8-8     who is designated by such owner or lessee to serve in that

 8-9     capacity.

8-10                 (2)  To be eligible for appointment under [Paragraph

8-11     (F) or (G) of Subdivision (1) of] Subsection (c)(1)(F) or (G) of

8-12     this section, a person must be a resident of the city making the

8-13     appointment [and may not be a person described by Paragraph (B),

8-14     (C), (D), or (E) of Subdivision (1) of this subsection].

8-15                 (3)  To be eligible for appointment under [Paragraph

8-16     (H) of Subdivision (1) of] Subsection (c)(1)(H) of this section, a

8-17     person must be a member of The [the] Woodlands Community

8-18     Association, Inc  [and may not be a person described by Paragraph

8-19     (B), (C), (D), or (E) of Subdivision (1) of this subsection.]

8-20                 [(4)  A person or entity that owns an interest in a

8-21     general or limited partnership owning real property in the district

8-22     or who has a lease of real property in the district with a

8-23     remaining term of 10 years or more, excluding options, is

8-24     considered to be an owner of real property for purposes of this

8-25     subsection].

8-26           (c)(1)  On the effective date of this Act, the following

8-27     persons shall constitute the initial board and shall serve as

 9-1     provided in this Act:

 9-2                       (A)  Vicki D. Armstrong;

 9-3                       (B)  Roger L. Galatas;

 9-4                       (C)  R. A. Kutsche;

 9-5                       (D)  Michael H. Richmond;

 9-6                       (E)  Bruce M. Withers, Jr.;

 9-7                       (F)  one individual appointed by the city council

 9-8     of the City of Oak Ridge North;

 9-9                       (G)  one individual appointed by the city council

9-10     of the City of Shenandoah; and

9-11                       (H)  one individual appointed by the board of

9-12     directors of The [the] Woodlands Community Association, Inc.

9-13                 (2)  If one or more of the initial directors listed in

9-14     this subsection fails to qualify for office within 90 days after

9-15     the effective date of this Act, the remaining directors shall

9-16     appoint qualified persons to fill the vacancies for the unexpired

9-17     terms.

9-18           (e)  A vacancy in the office of director shall be filled by

9-19     appointment of a qualified individual by a majority vote of the

9-20     remaining directors, except that if the number of directors for any

9-21     reason is less than five, on petition of a resident of or owner of

9-22     real property in the district, the commission shall appoint the

9-23     required number of qualified individuals to fill the vacancies.

9-24     The board may remove a director for misconduct or failure to carry

9-25     out the director's [his] duties by unanimous vote of all of the

9-26     remaining directors.

9-27           (k)  A person who qualifies to serve on the board [under

 10-1    Subsection (b) of this section] shall be qualified to serve as a

 10-2    director and participate in all votes pertaining to the business of

 10-3    the district regardless of any common law doctrine or any statutory

 10-4    conflict-of-interest, incompatibility, or similar provision

 10-5    [provisions] to the contrary.

 10-6          SECTION 6.  Section 11, Chapter 289, Acts of the 73rd

 10-7    Legislature, Regular Session, 1993, is amended by amending

 10-8    Subsection (h) and adding Subsection (j) to read as follows:

 10-9          (h)  In the event that all or part of the territory of the

10-10    district is annexed by or incorporated into a municipality that

10-11    [which] has adopted and is imposing a sales and use tax or that

10-12    later adopts and imposes a sales and use tax, the sales and use tax

10-13    imposed by the district in such annexed or incorporated territory

10-14    shall be reduced, if required to comply with the provisions hereof,

10-15    in even multiples of one-half percent, and without the necessity

10-16    for an election, such that the combined rate of all sales and use

10-17    taxes imposed by the county, the [annexing] municipality, and all

10-18    other political subdivisions within the annexed or incorporated

10-19    territory of the district will not exceed two percent, provided

10-20    that:

10-21                (1)  the municipality shall reimburse the district for

10-22    the amount of the tax reduced in the manner provided by Section

10-23    312.637(h), Tax Code, until the bonds of the district payable or

10-24    secured, wholly or partly, from the proceeds of the sales and use

10-25    tax are no longer outstanding;

10-26                (2)  a sales and use tax previously adopted by the

10-27    district for such annexed or incorporated territory shall not be

 11-1    reduced to less than one-half percent; and

 11-2                (3)  [provided further that] no reduction of the

 11-3    district's sales and use tax in the portions of the district not so

 11-4    annexed or incorporated shall be required.

 11-5          (j)  The district is entitled to examine and receive

 11-6    information related to the levy, assessment, and collection of

 11-7    sales and use taxes to the same extent as if the district were a

 11-8    municipality.

 11-9          SECTION 7.  Chapter 289, Acts of the 73rd Legislature,

11-10    Regular Session, 1993, is amended by adding Sections 11A  and 11B

11-11    to read as follows:

11-12          Sec. 11A.  HOTEL OCCUPANCY TAX.  (a)  In this section,

11-13    "hotel" has the meaning assigned by Section 156.001, Tax Code.

11-14          (b)  The board by order may impose a tax on a person who,

11-15    under a lease, concession, permit, right of access, license,

11-16    contract, or agreement, pays for the use or possession or for the

11-17    right to use or possession of a room that is in a hotel located in

11-18    the boundaries of the district, costs $2 or more each day, and is

11-19    ordinarily used for sleeping.  The amount of the tax may not exceed

11-20    seven percent of the price paid for a room in a hotel.

11-21          (c)  A district by order may repeal, increase, or decrease

11-22    the rate of a tax imposed under this section.

11-23          (d)  Except as inconsistent with this section and Section 11B

11-24    of this Act and subject to the limitations prescribed by Sections

11-25    352.002(b) and (c), Tax Code, Subchapter A, Chapter 352, Tax Code,

11-26    governs a hotel occupancy tax authorized under this section,

11-27    including the collection of the tax.

 12-1          (e)  The district is entitled to examine and receive

 12-2    information related to the levy, assessment, and collection of

 12-3    hotel occupancy taxes to the same extent as if the district were a

 12-4    municipality.

 12-5          (f)  For purposes of this section, a reference in Subchapter

 12-6    A, Chapter 352, Tax Code, to a county or the county's officers or

 12-7    governing body is a reference to the district or the district's

 12-8    officers or governing body, as appropriate.

 12-9          Sec. 11B.  USE OF HOTEL OCCUPANCY TAX PROCEEDS.  (a)  The

12-10    district shall apply the proceeds from a hotel occupancy tax

12-11    imposed under Section 11A of this Act for any of the district's

12-12    purposes and for the purposes described by Section 352.1015, Tax

12-13    Code, to the extent considered appropriate by the board.

12-14          (b)  During each interval of three calendar years following

12-15    the date on which a hotel occupancy tax imposed under Section 11A

12-16    of this Act is initially collected, the board may not apply an

12-17    annual average of more than 10 percent of the amount of tax

12-18    collected under that section, excluding any interest earnings or

12-19    investment profits and after a deduction for the costs of imposing

12-20    and collecting the taxes, for the administrative expenses of the

12-21    district or a district purpose other than:

12-22                (1)  the costs of advertising and promoting tourism;

12-23    and

12-24                (2)  the costs of business development and commerce,

12-25    including the costs of planning, designing, constructing,

12-26    acquiring, leasing, financing, owning, operating, maintaining,

12-27    managing, improving, repairing, rehabilitating, or reconstructing

 13-1    improvement projects for conferences, conventions, and exhibitions,

 13-2    manufacturer, consumer, or trade shows, and civic, community, or

 13-3    institutional events.

 13-4          (c)  For purposes of this section, a reference in Subchapter

 13-5    A, Chapter 352, Tax Code, to a county or the county officers or

 13-6    governing body means the district or the district's officers or

 13-7    governing body, as appropriate.

 13-8          SECTION 8.  Chapter 289, Acts of the 73rd Legislature,

 13-9    Regular Session, 1993, is amended by adding Section 12A to read as

13-10    follows:

13-11          Sec. 12A.  BONDS.  (a)  The board may issue bonds in the

13-12    manner provided by Subchapter J, Chapter 375, Local Government

13-13    Code.  Sections 375.207 and 375.208, Local Government Code, do not

13-14    apply to bonds issued under this section.

13-15          (b)  If the district issues bonds for the primary purpose of

13-16    providing water, sewage, or drainage facilities, the district must

13-17    obtain the commission's approval in the manner provided by Chapter

13-18    49, Water Code.

13-19          (c)  In addition to the sources of money described by

13-20    Subchapter J, Chapter 375, Local Government Code, the bonds of the

13-21    district may be secured and made payable, wholly or partly, by a

13-22    pledge of any part of the net proceeds the district receives from:

13-23                (1)  a specified portion, but not more than one-half

13-24    percent, of the sales and use tax authorized by Section 11 of this

13-25    Act;

13-26                (2)  the hotel occupancy tax authorized by Section 11A

13-27    of this Act; and

 14-1                (3)  repayments the district receives from a

 14-2    municipality because of a required reduction of the district's

 14-3    sales and use tax.

 14-4          SECTION 9.  Section 14, Chapter 289, Acts of the 73rd

 14-5    Legislature, Regular Session, 1993, is amended by adding Subsection

 14-6    (d) to read as follows:

 14-7          (d)  The district may not be dissolved by a municipality in

 14-8    which the district is located.

 14-9          SECTION 10.  Section 12, Chapter 289, Acts of the 73rd

14-10    Legislature, Regular Session, 1993, is repealed.

14-11          SECTION 11.  (a)  The proper and legal notice of the

14-12    intention to introduce this Act, setting forth the general

14-13    substance of this Act, has been published as provided by law, and

14-14    the notice and a copy of this Act have been furnished to all

14-15    persons, agencies, officials, or entities to which they are

14-16    required to be furnished by the constitution and other laws of this

14-17    state, including the governor, who has submitted the notice and Act

14-18    to the Texas Natural Resource Conservation Commission.

14-19          (b)  The Texas Natural Resource Conservation Commission has

14-20    filed its recommendations relating to this Act with the governor,

14-21    lieutenant governor, and speaker of the house of representatives

14-22    within the required time.

14-23          (c)  All requirements of the constitution and laws of this

14-24    state and the rules and procedures of the legislature with respect

14-25    to the notice, introduction, and passage of this Act are fulfilled

14-26    and accomplished.

14-27          SECTION 12.  The importance of this legislation and the

 15-1    crowded condition of the calendars in both houses create an

 15-2    emergency and an imperative public necessity that the

 15-3    constitutional rule requiring bills to be read on three several

 15-4    days in each house be suspended, and this rule is hereby suspended,

 15-5    and that this Act take effect and be in force from and after its

 15-6    passage, and it is so enacted.